Open Source ERP: Fact and Fiction

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Josep Mitjà
The ERP business is one that has long been dominated by giant enterprise software vendors like SAP and Oracle’s PeopleSoft. Microsoft has entered the fray, too, with its Dynamics applications to further make the ERP marketplace even more competitive.

Into that hostile and aggressive environment walks open source ERP vendor Openbravo. The Spain-based vendor is on a rapid development cycle with new point release of its namesake ERP application set for March, April and May. Openbravo is also one of the founding members of the recently launched Open Solutions Alliance (OSA), which aims to improve open source solution interoperability.

Sitting at the helm of Openbravo is COO Josep Mitjà who manages the company’s operations. He recently chatted with internetnews.com about his company and the prospects of competing in one of enterprise software’s most competitive spaces.

Q: What do you see as the biggest misconception in the marketplace today about what Openbravo does or doesn’t do?

We’re an open source, Web-based ERP solutions company. We communicate this in a very straightforward manner to customers, partners, investors and industry observers, and to date there have been very few misconceptions around this message. We do of course have to deal with broader misconceptions surrounding the markets we compete in: specifically ERP and open source technology/applications.

ERP has a reputation for being complex — largely from dated enterprise deployments that have spiraled out of control, gone over budget or simply failed to deliver.

However, ERP’s role in consolidating business processes for companies of all sizes is slowly becoming better understood, and we have numerous small and medium business customers across production, distribution, services and logistics industries that are able to quickly and easily demonstrate the benefits they have gained from Web-based ERP.

Likewise, trust in open source is growing, but in the past companies new to the concept have been wary. Although they have understood that the software is free, they hadn’t really understood the whole business model and the development and services philosophy behind open source companies, such as Openbravo.

Both of these wider industry misconceptions can be dispelled by sharing the positive experiences of our existing customers, while further educating and guiding vendors and potential customers by becoming involved with exciting initiative, such as the OSA [Open Solutions Alliance].

Q: Why did Openbravo join the OSA? Is it something that you think is really necessary?

The alliance is mostly about interoperability and promoting open source as a real alternative for business users.

Every day our customers ask us whether we know about stable open source solutions to meet their business needs. They also want that these solutions can work together without having to invest a small fortune in integration. So I believe the alliance will address two very real concerns business users have.

At the end of the day, our business is solving problems for our clients, and I think being a member of the alliance is nothing more than trying to solve some of their problems.

Q: Are other open source projects, such as Compiere, the competition, or is it more about displacing proprietary vendors?

We have very few competitors able to provide open source ERP solutions. So our real competition is in the shape of proprietary vendors such as SAP, Oracle and Microsoft that have a historical interest and experience in the enterprise market but have moved into the SME market. These are the real competitors we face in day-to-day RFQs.

We do have inquiries about Compiere, mainly because Openbravo’s application dictionary originated from a 2002 version of Compiere, and as the application dictionary defines the contents of each screen, the two applications can appear to have some similar features.

Compiere’s work was seminal and we are careful to duly identify any original and modified code. However, contrary to Compiere, we have a dedicated engine that delivers a fully Web-based interface. Our current code base is almost entirely comprised of original, continually evolving Openbravo-developed code.

Q: What have been the barriers to adoption so far for Openbravo and what are you doing to overcome them?

Barriers to adoption aren’t specific to Openbravo, but are concerned with the overall evolving image of ERP solutions and awareness of open source technology and applications.

ERP has a reputation for being complex — largely from dated enterprise deployments that have spiraled out of control, gone over budget or simply failed to deliver.

Likewise trust in open source is growing, but in the past companies new to the concept have been wary. Although they have understood that the software is free, they hadn’t really understood the whole business model and the development and services philosophy behind open source companies, such as Openbravo.

Q: As the COO, what are the biggest technology innovations/research that you’re working on to push the envelope on Openbravo’s products?

First, being totally involved and committed to the open source industry. You don’t just play in the open source market; you embrace it.

Last fall we had almost 160,000 projects posted on SourceForge and held the No. 1 slot. In addition, I believe that investment in R&D is absolutely key. As the COO I share the responsibility to ensure that we have the funding, as well as the vision to make this happen.

In January 2006, Openbravo secured a $6.4m (€5 million or £3.4m) financing agreement. This record funding for an open source ERP company will be used to fuel further software development while enabling the company to grow internationally more rapidly.

Q: What are your biggest challenges?

One of our greatest challenges is to educate and inform the industry, developers and end-businesses about the capabilities of open source ERP, and to continue to compete effectively against companies with the scale of SAP and Microsoft.

Although we feel that we are more nimble as a small company, and can react faster to market conditions and partner and customer demands, these organizations remain a dominant incumbent force.

Also, we are continually developing a solution that fits the needs of multiple industries. Openbravo was designed to make it as easy as possible to develop new functionality and our growing network of contributors is also adapting this product to specific industry verticals, but it is an ongoing challenge of adaptation and refinement.

This article was first published on InternetNews.com. To read the full article, click here.